SEIS Specific Risks

SEIS Specific Risks

Tax Risks

Due to the changes in legislation Investors should be made aware that the Seed EIS and applicable legislation may be amended or withdrawn leading to the opportunities for tax reliefs.
There is also a possibility that any investee company may lose its qualifying status, therefore this may lead to Seed EIS tax reliefs being claimed back by HMRC in relation to that particular investment.
An Example of this is investing in a smaller, unquoted company which may constitute as Seed EIS qualifying as a high risk investment strategy; therefore they may go bankrupt after three months.
An investor therefore must retain their shares in a Seed EIS company for a minimum period of three years from the subscription date. Failures to do so will lead to HMRC claiming back any of the tax relief.
Investment in such Seed EIS Companies is by nature illiquid and uncertain and consequently involves a higher degree of risk than a portfolio of quoted shares.

On-going Risks

As SEIS companies are not traded on exchange, they are considered to be illiquid. Realisation of investments in unquoted companies can be difficult and may take considerable time, therefore must be held for a minimum of three years to benefit from income tax relief due to their inflexible nature.
Please note that Capital is only returned when the underlying investment is sold, therefore if investing in a fund many companies are devising opaque and estoric funds to exploit the tax opportunities with enough understanding of the underlying investments.

Provider Risk if using a fund

Many funds may mitigate responsibility for risk if they are passed on to the investor or IFA, it is the responsibility of investors to satisfy themselves that any investments made are suitable for them.
Please note – The past performance of GrowthInvests Ltd is not necessarily a guide to future performance. The value of an investment may go down as well as up, in which case an investor may not get back the amount invested.
Please note that we recommend you use an elective professional you may know you understand what you are agreeing to, as often these types of investments may involve a loss of protection.

Risks Specific to Seed EIS Funds

Investing in smaller, unquoted companies which constitute Seed EIS qualifying companies is a high risk investment strategy. Proper information for determining the value of Seed EIS investments or the risks to which they are exposed may not be available.
Investment in such Seed EIS companies can offer good investment returns but by its nature is illiquid and uncertain and consequently involves a higher degree of risk than a portfolio of quoted shares. Realisation of investments in unquoted companies can be difficult and may take considerable time. There is no liquid market on any public exchange or elsewhere, as such; an investment in these type of companies within GrowthInvest will not be readily realisable.
To qualify for the up-front SEIS income tax relief and SEIS capital gains relief an investor must retain their shares in an SEIS company for a minimum period of three years from the subscription date. Failure to do so may lead to HMRC clawing back any of the reliefs claimed.
HMRC may also claw back any reliefs claimed, if the investor has received value from an investee company. Furthermore, although GrowthInvests Ltd will take reasonable steps to ensure that investee companies are qualifying for the purposes of Seed EIS, there is a possibility that the investee company in question may lose its qualifying status. This may lead to Seed EIS tax reliefs being clawed back by HMRC in relation to that particular investment.
Investors should also be made aware that GrowthInvests has been set up to comply with current legalisation, however it may be the case that the Seed EIS and applicable legislation is amended or withdrawn leading to the removal of any opportunities for tax reliefs.

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Risk Warning

Investing in start-ups and early stage businesses involves risks, including illiquidity,
lack of dividends, loss of investment and dilution. It should be done only as part of a
diversified portfolio. GrowthInvest investments are targeted exclusively at investors
who understand the risks of investing in early stage businesses and can make their own
investment decisions.Pitches for investment are not offers to the public and investments
can only be made by members of GrowthInvest on the basis of information provided in the
pitches by the companies concerned.

We take no responsibility for this information or for
any recommendations or opinions made by the companies. We are unable to provide advice,
unless you register as a Professional Client. This website is not directed at or intended for publication or distribution to any person
(natural or legal) in any jurisdiction where doing so would result in contravention of any
applicable laws or regulations. The investment opportunities offered on this platform is not
covered by the Financial Services Compensation Scheme.

Please note that the valuations of the businesses have not been independently verified unless stated otherwise.

Information

Legal Info

GrowthInvest is a trading name of EIS Platforms Limited. EIS Platforms Limited (FRN: 694945) is an appointed representative of Sapphire Capital Partners LLP
(FRN:565716) which is authorised and regulated by the Financial Conduct Authority in the UK.
All rights reserved 2019 @ growthinvest